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Why pay $999/mo, when you can have a few hackers code it up in a couple of weeks for a few grand.

The long road of our industry is littered with the corpses of projects which would only take a few programmers a couple of weeks to program. But technical risk isn't the big worry here for a startup.

Hell, someone should do it here, would be a decent startup idea, copy them, but charge $29.99/$59.99/$99.99 for your plans.

That hypothetical startup would be:

a) Trying to market the product without having a successful reference implementation available and without having Joel & Jeff to bootstrap the reference implementation.

b) Be aimed squarely at the low end of the market. (i.e. penny-pinching pathological customers rather than enterprises for whom $1,000 is inconsequentially cheap if it brings projects in on time) This buys you some very fun customer support duties.

c) Need to sell minimally several dozen companies on a quirky knowledge-base type product per FTE they wanted to support.

d) Get to compete on search advertising with someone who can afford to outspend them ten-to-one for customer acquisition.

The first part, I wasn't talking about building it. I was talking about a customer, who is stuck paying $999-2500 a month, for a product that can be built by a few programmers in a few weeks.

That hypothetical startup wouldn't need to give customer service. You want customer service and like paying large fees? Go to stackexchange, you want a working solution at a huge discount? You come to the hypothetical startup.

Basically its the case of Stackexchange playing the role of a big pricey inbred company, and you giving them the 34signals option


3 programmers * 2 weeks * $100/h = $24k

Or, the ability to run this right now for 10m to 2 years.

To be fair, the average programmer is not earning $180-200k per year, not even the average contractor.

Correct. But the total cost of hiring a programmer is easily estimated as 3*salary. $200k/year is a fairly cheap full-time programmer with overhead.

Don't forget to include all the office space, gym membership, soda, insurance, maternity leave, matching 401(k) contributions, hardware, software, internet access, telephone service, tech support, sysadmins, office managers, etc. necessary to support that one programmer.


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